OUTOTEC OYJ INTERIM REPORT APRIL 27, 2015 AT 12.45 PM
INTERIM REPORT JANUARY-MARCH 2015
Good growth in orders and service sales
January-March 2015 in brief (comparison period in 2014):
- Order intake: EUR 260 (210) million, +23% (in comparable currencies +18%)
- Order backlog: EUR 1,132 (1,216) million, -7%
- Sales: EUR 277 (344) million, -19% (in comparable currencies -22%)
- Service sales: EUR 118 (108) million, +10% (in comparable currencies +7%)
- EBITA (excluding one-time items): EUR 8 (12) million, -38%
- EBITA (excluding one-time items), %: 2.8 (3.6)
- Earnings per share: EUR 0.00 (0.03)
Financial guidance for 2015 reiterated
Based on the 2014 year-end backlog and current operating environment, the management estimates that in 2015:
- Sales will be approximately EUR 1.2-1.4 billion, and
- EBITA (excluding one-time items) will be approximately 5-7%
|Summary of the Group's key figures||Q1||Q1||Last 12||Q1-Q4|
|Order intake, EUR million||259.7||210.3||1,227.3||1,177.9|
|Service order intake, EUR million||131.2||133.3||552.9||555.0|
|Share of services in order intake, %||50.5||63.4||45.1||47.1|
|Order backlog at the end of the period, EUR million||1,132.2||1,215.8||1,132.2||1,138.0|
|Sales, EUR million||277.5||343.9||1,336.2||1,402.6|
|Service sales, EUR million||118.3||107.5||529.8||519.0|
|Share of services in sales, %||42.6||31.3||39.7||37.0|
|Gross margin, %||28.4||21.7||24.3||22.9|
|EBITA (excluding one-time items), EUR million||7.7||12.4||51.3||56.0|
|EBITA (excluding one-time items), %||2.8||3.6||3.8||4.0|
|EBIT, EUR million||3.6||8.7||5.3||10.4|
|Profit before taxes, EUR million||1.0||6.4||-5.2||0.2|
|Net cash from operating activities, EUR million||-35.3||4.7||-20.1||19.9|
|Net interest-bearing debt at the end of the period, EUR million||51.2||-82.7||51.2||-5.8|
|Gearing at the end of period, %||11.4||-18.7||11.4||-1.3|
|Working capital at the end of the period, EUR million||-2.0||-24.6||-2.0||-28.2|
|Return on investment, %, LTM||0.2||21.6||0.2||1.7|
|Return on equity, %, LTM||-0.8||17.0||-0.8||0.0|
|Personnel at the end of the period||4,966||4,834||4,966||4,571|
|Earnings per share, EUR||0.00||0.03||-0.02||0.00|
President and CEO Pertti Korhonen:
"The market continued moving sideways in the first quarter of 2015 due to weak metal prices development, and minerals and metals producers' focus on maximizing free cash flows. Therefore I am pleased that we managed to grow our order intake by 18 percent in comparable currencies.
Our sales contracted from the comparison period due to small order intake in the plant and equipment businesses in 2014. I am pleased that our service sales increased 7 percent with comparable currencies despite the weak market.
Our profitability was weak due to lower sales and currency hedge related valuation losses. The Minerals Processing business area's profitability weakened, whereas the Metals, Energy & Water business area improved its profitability from the comparison period, despite lower sales. By the end of March 2015 we have achieved EUR 26 million annual savings in our EUR 45 million cost savings program launched in October 2014 and the program is proceeding on track.
The acquisition of Kempe Engineering's aluminum smelter technologies as well as service and spare parts businesses in the Middle East and Africa, will strengthen our service capabilities and complement our aluminum technology offering. In order to reduce our exposure to mining and metals Capex market volatility, we will continue to grow our service business and further strengthen our business portfolio through acquisitions.
The market outlook for 2015 continues to be uncertain due to volatile metal prices and customers' focus on maximizing their free cash flows. However, there are good prospects for sustainable solutions in certain commodities and geographies, and we expect that investments in base metals will gradually start to revitalize to compensate for reducing capacity. We have a strong sales funnel and our priority going forward is to grow our order intake and improve profitability."
RECLASSIFICATION OF PRODUCT MANAGEMENT COSTS IN OUTOTEC'S INCOME STATEMENT
In Outotec's income statement from January 1, 2015, all costs related to technical product management have been included in Research and Development (R&D) expenses, and all costs related to commercial product management have been included in Selling and Marketing expenses. Previously some of the costs related to product management activities were reported in the Cost of Sales above the Gross Margin in the income statement.
Since 2011, Outotec has been developing and deploying uniform global business processes and related information technology platforms. The company has now established a more comprehensive technical product management process as part of its R&D, and a commercial product management process as part of its selling and marketing. The reclassification of product management costs is consistent with the redefinition of the product management business processes and reflects the true nature of these activities in the profit and loss statement.
When applying the reclassification to Outotec's 2014 income statement, EUR 19.6 million transfers from Cost of Sales to R&D expenses, and EUR 6.9 million to Selling and Marketing expenses.
Reclassification does not impact Outotec's sales, EBITA, EBIT, or 2015 financial guidance.
ADDITIONAL SEGMENT INFORMATION
Outotec has started to report the segments' order intake and service sales figures as of January 1, 2015.
This text is a summary of Outotec's January-March 2015 Interim Report. The full report is available as an attachment to this report.
Pertti Korhonen, President and CEO
tel. +358 20 529 211
Mikko Puolakka, CFO
tel. +358 20 529 2002
Rita Uotila, Vice President - Investor Relations
tel. +358 20 529 2003, mobile +358 400 954 141
Format for e-mail addresses: email@example.com
Date: Monday, April 27, 2015
Time: 2.30-3.30 pm (Finnish time)
Venue: Bank, Unioninkatu 20, Helsinki
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FINANCIAL REPORTING SCHEDULE IN 2015
- Interim Report for January-June: July 30, 2015
- Interim Report for January-September: October 29, 2015
Outotec provides leading technologies and services for the Sustainable use of Earth's natural resources. As the global leader in minerals and metals processing technology, we have developed many breakthrough technologies over the decades for our customers in the metals and mining industry. We also provide innovative solutions for industrial water treatment, the utilization of alternative energy sources and the chemical industry. Outotec shares are listed on Nasdaq Helsinki.
|Outotec's Interim Report January-March 2015||Download|